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France to cut defence budget by 3.5 bln euros-source

PARIS, July 1 (Reuters) - France’s defence budget will be cut by 3.5 billion euros ($4.28 billion) in 2011-2013, a source familiar with the matter said on Thursday, as part of a government drive to reduce public spending.

However, France’s Defence Ministry hopes the overall amount cut could fall to 1.5 billion euros thanks to income of around 2 billion euros from the sale of barracks and telecoms frequencies, said the source. The budget will come to 30.1 billion euros in 2011 as in 2010, 30.5 billion euros in 2012 and 31 billion euros in 2013.

The cuts will be made without affecting large contracts as well as programmes involving Rafale planes AVMD.PA, Fremm multi-purpose frigates, VBCI armoured vehicles, Barracuda submarines or Felin infantry combat systems, the source said.

France's A400M EAD.PA programme is also not affected by the cuts, the source added. (Reporting by Elizabeth Pineau; Writing by Sophie Taylor)